School buses operated by First Student Transportation await pickup of students Tuesday at Barre City Elementary and Middle School. First Student’s contract will expire in June and Student Transportation Services will take over the school’s busing contract.

BARRE — First Student Transportation came in second and Student Transportation Services came in first, but the big winner when it comes to newly submitted busing bids was the Barre City School Board, which was able to trim an extra $103,000 from the bottom line of its recently failed budget request by opening two envelopes.

Also Monday, the board put the finishing touches on the budget it will ask voters to approve next month, finalized the warning for the May 14 special election, and was told the district is sporting a $91,000 surplus. But the big news came in the form of busing bids — at least one of which was way better than expected.

The board had briefly flirted with dropping busing from its budget entirely before learning that wasn’t possible. It did decide to cut one bus as a cost-saving measure but agreed Monday night that wasn’t necessary.

Board members were told the reason could be found in Student Transportation Services’ bid to take over busing students to and from Barre City Elementary and Middle School.

The company’s three-year, $1.4 million bid for nine new buses comes with a first-year cost of $447,121 — nearly $103,000 less than the $550,000 that was included in the budget voters rejected, 652-483, on Town Meeting Day.

Under the contract, which board members approved Monday night, busing costs will climb to $460,534 next year and to $474,350 when the agreement enters its final year on July 1, 2015.

The third-year cost of the Student Transportation Services contract was nearly $100,000 less than the first-year cost that was quoted by the school’s longtime bus provider, First Student Transportation.

First Student’s bid for nine new buses contemplated a three-year, $1.75 million contract that would have cost the district $569,633 during the fiscal year that starts July 1. Even an alternative proposal to provide nine used buses that was submitted by First Student exceeded the cost for the new vehicles quoted by Student Transportation Services, an established company that broke into the central Vermont market last year when it secured contracts for school districts in Williamstown and Northfield.

Though both companies quoted seven- and eight-bus alternatives, board members agreed the savings reflected in Student Transportation Services’ nine-bus bid negated the need to shrink the size of the district’s bus fleet.

The favorable bus bids mark the second significant savings the district has realized since voters rejected the board’s initial budget request. Thanks to an overly conservative estimate involving a projected health insurance increase, the board was previously able to shave roughly $30,000 from the school spending plan.

The unanticipated savings associated with the busing contract and health insurance costs, coupled with the board’s decision to abandon the planned expansion of the district’s preschool program for a staff-related savings of $95,000, are all reflected in the $12.1 million budget the board adopted Monday night.

That is the budget that voters will be asked to approve May 14 when they revisit their Town Meeting Day rejection of budgets for both the city and its central elementary school, as well as $61,000 in funding for a school-based police officer.

Not counting $725,000 in anticipated grant funding that will not affect local taxes, the proposed school budget now stands at $12,142,027. That’s nearly $250,000 less than the board’s initial request of $12,389,947 and nearly $1.1 million, or 9.8 percent, more than the $11,053,509 budget that voters approved a year ago.

Board members have blamed a significant spike in the cost of providing special education services for the increase in the proposed budget, while defending the need for an additional administrative position that remains in the budget.

The better-than-expected bus bids couldn’t have come at a better time for a board that is hoping to persuade Granite City voters to approve a spending plan that they contend is both educationally necessary and a bargain based on the fact that the district spends less per pupil than the vast majority of schools in the state.

Among other things it shaved roughly a penny off the projected tax rate increase that would be needed to finance the revised budget. Thanks largely to a modest increase in the city’s common level of appraisal — a figure the state uses to adjust tax rates based on how accurately it determines a community’s property is assessed — approval of the budget now being proposed for Barre City Elementary and Middle School would trigger a rate hike of about 2.5 cents.